On Saturday 31st October 2020 Prime Minister, Boris Johnson, announced that England would be going into its second lockdown to reduce the spread of coronavirus. Business financial support has therefore been extended, the details of which we will summarise in this blog.
Currently the new lockdown is set to begin on the 5th November running until ‘at least’ 2nd December, and Cabinet Office, Michael Gove, has admitted it will be reviewed on the 2nd of December, leading many to believe there will likely be some extension depending on the efficacy of the current approach. If your business is struggling to stay afloat during the pandemic, please do consult your accountant who may be able to help.
The furlough scheme is being returned to the original 80% of employees salary up to £2,500 per month is the biggest, and perhaps most impactful update, with thousands across the country facing redundancy throughout this winter even before a second lockdown was announced.
Unlike the original iteration of the CJRS (Coronavirus Job Retention Scheme), employers will still be responsible for pension and NI contributions for the full 80% of employee salary – so this will still have a significant negative impact on the most severely affected businesses.
As with the recent previous months, employees may work part time and have their unworked hours paid for by the CJRS which presents a middle ground for businesses who manage to remain open in some capacity.
Update 05.11.2020: Furlough Scheme to run until March 2021, and to be reviewed in January 2021.
Support For Self Employed
Updated (03/11/2020) The government has also now doubled support for the self employed who qualify for the SEISS from 40% of average trading profits to 80%. Please note this is confirmed for November – the SEISS is usually paid as a quarterly grant, should the lockdown be extended into December we expect further announcements as to the level of support offered to self employed. Currently any support for December and January stands at 40% and a total maximum grant of £5160 for Nov-Jan. The online service for the next grant will be available from 30th November 2020.
Disappointingly, those who were newly self employed when the pandemic hit remain with no support whatsoever. As do company directors who predominantly use dividends as their income. Some 2.9 million workers who may or may not have been affected to varying degrees have found themselves excluded from the CJRS and SEISS.
Local Restrictions Support Grant
Local authorities have been given funding to help support struggling businesses, the scheme was originally introduced in September to work in conjunction with the local Tier-based lockdowns. The LRSG now applies throughout England, and offers up to £3000 per month of closure at the local council’s discretion.
Forced Closure Business Grants
Businesses forced to close will be eligible for monthly funding as follows:
- For properties with a rateable value of £15k or under, grants to be £1,334 per month, or £667 per two weeks;
- For properties with a rateable value of between £15k-£51k grants to be £2,000 per month, or £1,000 per two weeks;
- For properties with a rateable value of £51k or over grants to be £3,000 per month, or £1,500 per two weeks.
Business Interruption Loan Scheme
The 100% Government-backed loan schemes are still available, with the deadline to apply extended to 30th Nov 2020. In addition, businesses who have taken out these loans will now have the advantage of increasing their loan terms to 10 years with no repayments for the first 12 months and interest payments covered by the government for the first 12 months too.
Though industry experts are urging the government to introduce more grants, as loans are only pushing the financial difficulty down the line a little.